ADVICE COLUMN: Lanarkshire broker gives advice on mortgage rate rises

dailyrecord.co.uk:

Hello and welcome to this month’s advice column.I’m often asked what I think will happen with interest rates in the next year or two and I wish I could provide a definitive answer.Unfortunately, we’re not privy to inside information on these big decisions and it’s left to the Bank of England’s Monetary Policy Committee to decide, on a monthly basis, if they’re going to change the Base Rate to reflect the current economic climate.This effectively means that overall rates on mortgages will increase if it goes up and rates “should” go down if they reduce it.Since 2007, we were in a period of time which saw unprecedented low interest rates and there were no significant changes to the base rate going into the last year or so, where it was sitting at 0.25 per cent.However, during 2022 and now midway through 2023, it has gone up multiple times, with it currently sitting at five per cent, meaning that mortgage rates that lenders offer are creeping up each month as well.Good news for savers, not so good news for borrowers.This, of course, means that anyone looking for a new mortgage will almost certainly have to pay more than they would have previously if buying or remortgaging.Having said that, we have perhaps become used to having it so low for so long, with the base rate figures around 2007/2008, during the time of the “credit crunch”, sitting around 4.5 to 5.75 per cent.

Go back even longer into the 80s and 90s and the base rate was hitting peaks of up to 14 per cent.So maybe a bit of perspective is required.There’s no way of knowing how it’s going to pan out over the next few months, even years, in terms of making decisions on whether to buy a property/remortgage with a longer term fixed rate more of a personal choice and